> That determines things like wages.
How a worker is treated is part of wages. It has a very real impact on the jobs people take. If you are, for example expected to work 60h weeks vs 40h weeks you take the 60h company if nobody else is hiring.
> Also, if there is a labor surplus then how is a union going to do any good? The company would just let them go on strike and hire replacements.
Scabs crossing picket lines have a real hard time. And, historically, unions have banded together to boycott employers who hire scabs.
> That seems to have the word "law" in it.
Law isn't the same thing as a regulation. Anyone that proposes a "free market" is looking at a market determined by contract law.
Or do you think there's some other way to operate a market that doesn't ultimately need a 3rd party to take disputes to?
> which is why there are contracts the government shouldn't enforce.
I agree. My points were more digs at free market absolutism.
> Libertarian ideology assumes that monopolies form as a result of government rules.
No it doesn't. That's silly. You can read up on any libertarian thinker and they'll all happily argue that monopolies actually aren't bad things. A business that can capture a market through scale efficiencies will always be argued as a good thing from the libertarian perspective.
> could force everyone into a contract to form a dictatorial government, which is anathema to the entire ideology.
I agree with your conclusion, but disagree with how you assess it as applying to libertarianism. A fundamental of anarchist-capitalist libertarian thinking is that the only role of government is contract enforcement. They see no problem with a private entity ending up with a monopoly of force so long as everyone agrees to the contracts they enter. That's why you can read about libertarians that support the notion of a company having it's own militia.
I mean, heck, the entire point of Ayn Rand's "Atlas Shrugged" was how government fails and how society would be much better off if all the smart people got together and formed their own private government in the wilderness (But don't call it government, call it a community organization or whatever). Ironically enough, the main actions of the protagonists was doing a general strike.
> How is there an inherent power imbalance in a competitive market?
As explained earlier, a market can be competitive with either a labor surplus or a labor shortage.
And even with a labor shortage, businesses can collude to undermine worker rights. It becomes harder with a wide market to do that, but not impossible. Real pages is such an example of a pretty wide and competitive market colluding to raise rent prices outside of market forces.
You can't just "go to a different employer" if they all treat employees the same way.
There's also simply a cost in switching jobs. It takes time to search for a new job and with an abusive employer that maybe hard to come by. For example, how do you do a job interview if your employer demands you are there from 9-5 every weekday?
That's the imbalance.
> The ultimate harm is that it makes the industry's products worse
Actually no. You can look up the reasons unions strike and it might surprise you to know it's not always about just getting more money for the union members.
For example, the USC [1] has done strikes specifically because medical facilities are under-staffing on nurses. They want more nurses to improve patient safety.
Money is a part of union negotiations, for sure, but often it's also just about making sure union members aren't overworked.
[1] https://www.nationalnursesunited.org/press/usc-nurses-hold-t...